/Gilt Summary: Although Spain's PSOE failed....>

EGBS: /Gilt Summary: Although Spain's PSOE failed to secure an outright majority

at the general election, the 37-seat gain has spurred the party to consider

governing alone. According to the FT, Deputy Prime Minister Carmen Calvo has

stated that the party's priority will be to form a minority government.

- The Spanish sovereign curve has flattened this morning with 2s30s narrowing

1.2bp on the day. 

- Core EGB yields are 1-2bp higher on the day, while periphery yields are a

touch lower. 

- A spokesman for the UK government has indicated that cross-party Brexit talks

will resume this afternoon, although there is not yet a scheduled meeting

between PM Theresa May and opposition Labour Leader Jeremy Corbyn. 

- Gilts trade slightly weaker this morning. Current yield levels: 2-year

-0.543%, 5-year -0.251%, 10-year 0.362%, 30-year 1.419%.

- Euribor futures are flat in whites and broadly 0.5-1.0 ticks lower in

reds/greens/blues. Short sterling futures are 1.0-2.0 ticks lower with slight

underperformance in reds/greens.